Australian Stock Market Report – Midday August 14, 2014

Stock market indices — A pedestrian holding her mobile phone looks at an electronic board showing graphs of various countries' stock market indices outside a brokerage in Tokyo July 22, 2014. Reuters

Local shares down for first time this week

 The Australian sharemarket has been unable to replicate yesterday's 1.3 per cent surge at lunch, with the All Ordinaries Index (XAO) down 0.3 per cent. Today is one of the busiest days for markets in the region with a barrage of earnings results out in Australia, Japan's quarterly growth update issued this morning and plenty of Chinese data scheduled for release this afternoon.

 While almost all sectors are losing ground, earnings results are driving many industries at lunch. Healthcare stocks are up 1.04 per cent. The gains are mainly due to CSL, which is the biggest company in the healthcare sector. CSL shares are up 2.9 per cent thanks to a 7.5 per cent rise in FY14 profit to US$1.3 billion.

 The mining sector is slumping by 0.8 per cent with a 1.4 per cent slump in the iron ore price overnight and Rio Tinto (RIO) trading ex-dividend not helping. The world's biggest miner, BHP Billiton (BHP) is down 0.4 per cent while the country's second largest resource firm, RIO is down 2.3 per cent as it trades ex-dividend today for its $1.03 interim dividend due to be paid to eligible investors on 11 September. Copper miner OZ Minerals (OZL) is down 3.1 per cent as it reported a worse than forecast half year loss of $7.4 million. This is disappointing the market following OZL's strong 1H production report.

 Three of the major banks are losing ground with the exception of Westpac (WBC) which is up 0.25 per cent. CBA is down 0.8 per cent despite posting a 12 per cent rise in net profit and a 10 per cent jump in its FY dividend. Queensland based financial services company Suncorp (SUN) is up 2.8 per cent after announcing its 49 per cent lift in FY profit to $730 million. Its Final ordinary dividend of 40 cents and its special dividend of 30cps will be paid to investors on 1 October.

 At lunch, 1.01 billion shares have been traded worth $2.19 billion. 360 stocks are up, 399 are in the red and 320 are unchanged.

 On the economic front, consumer confidence improved for thethird month; rising by 3.8 per cent in August. Despite the recent gains in sentiment, a reading of 98.5 means there are more pessimists than optimists (reading below 100.0). Confidence is down close to 7 per cent on last year. Wages have only picked up 0.6 per cent in the June quarter and 2.6 per cent over the year ; making it the weakest wage growth since 1997.

 In the region, a report showed that Japan's economy contracted by 1.7 per cent in the past quarter; the biggest contraction since 2011's natural disasters. This afternoon will be one of the busiest of the month in China. At 3.30pm (AEST) monthly statistics on retail spending, investment and production will be released for July. This could set the tone for the market as we approach the close.

 The Australian dollar buys US92.8c

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